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40's Need a Fix

40's Need a Fix

Submitted by Mark K on Thu, 2013-02-21 02:29

Lots of folks who've waited faithfully for a long time, and committed to an MVPA for a 40kWh car, and now are justifiably hurt to hear production is delayed again, while noob 85's get their cars quickly.

This gripe is legitimate - TM has made business decisions that have the effect of stringing along 40KW reservation holders. (Even if that wasn't the intent).

I think TM needs to mend fences with them. Here is my suggestion:

If you have a 40KW reservation and signed an MVPA, TM will refund your money on request, but grandfather in your option to purchase at the original price when the 40 starts production.

This would be a good faith gesture to credit supporters who've loaned them money. I think it would fix the problem and reaffirm folks' faith in the company's decency.

What do all of you think?

(Please note your res type in your post).

Crow |
24 februari 2013

Mark K - A year delay? I was not aware that you were promised your 40 kWh car before the last US Signature was delivered.

marcus.mendez1 |
24 februari 2013

Tough one. I will say this, whatever the internals are at TSLA, they need to make these Q1 13 #'s come he$$ or high water or their whole mission will be in jeopardy. I feel for those who haven't gotten the 40kw battery, but honestly, i just want the co to make it so that millions of people one day can drive ev's sooner rather than later. I support all the companies will to take the risk on this experiment. If you are into ev's you will soon be able to choose a BMW i3 as another shower range alternative. No one EV maker will satisfy the eventual size of this market.

Mark K |
24 februari 2013

The discussion on this thread has been productive, and aired many different considerations. To progress from talk to resolution, it should be distilled into specific action. To that end, here is a proposed summary:

Synopsis of Problem

Customers signed MVPA's with promises of imminent delivery. TM has since delayed 40kWh production twice, increasing the wait from 3 months to instead as much as a year. 40kWh customers believed they would be served earlier than later orders, but that is not the case. Regardless of the reason for the delay, while the MVPA allows TM to do this, customers feel mislead as a matter of principle. They feel that they took on cost and risk for a benefit that was promised but not delivered.

Form of Resolution

To resolve the conflict, the following elements are suggested:

1. TM emails 40kWh customers this week and apologizes for the delay.

2. 40 kWh MVPA holders can choose from the following options:

a. Exit the MVPA and recieve a full refund

b. Receive a credit toward additional equipment as compensation for the delayed delivery.

c. Receive a credit toward another model if they wish to get a car sooner.

This range of options lets each customer choose what helps them best, and puts choice back in their hands.

TM will need to study what is financially workable for each credit, but this form gives everyone, customer and vendor, a flexible framework for resolution.

Arguments are often complicated, but the best solutions are usually simple.

More rehashing won't improve things. If you want to see this matter get settled, please chime in and tell TM if this form of resolution works. If they have clear data, it's easier for them to act.

Brief, simple replies will help the most at this point.

ChasF |
24 februari 2013

+1 @ Mark K

I plan to contact George B. directly and will outline some of the points you've made above in my email.

JensHS |
24 februari 2013

I just went over to talk with a representative at Tesla Service Menlo Park and they were surprised to hear about the delay from me. Go figure.

They still think the 40s will be delivered starting late March and just told me to call the Ownership experience number to get an answer. Tesla might want to prepare their employees a bit more when they make these announcements...

Superliner |
24 februari 2013

The Site still says Production on the 40's will begin in March.

ChasF |
24 februari 2013

I talked to my rep just a day after the SH letter and he said he had heard about the delay the same way I did. When pressed, he also said "we can give you a much clearer delivery window the closer we get to your production date..." - that what you told me last time.

Mark K |
24 februari 2013

For heaven's sake, update the site. New problems are being created by the hour now. That would have been a 15 minute task the day you made the decision. No one was on it.

This entire avoidable problem was caused by communications snafus in the first place. Now, days after the Shareholder announcement of the delay, website visitors still get wrong information, and sales staff are still uninformed. This is more of same of what was ham-handed with the supercharger.

Here we have truly stellar technical achievement presented with less than mediocre communication. It's like seal team six hiring cub scouts for recon. That it is happening yet again is an embarrassment.

There are many companies with very ordinary products who execute much better customer communications than this. Best practices are already well established and widely available. What's up with this?

Not good.

Not for customers, not for shareholder value, and not for TM team members who are working their hearts out to change the world.

Please get on top of this and stop diminishing what you worked so hard to earn.

Vawlkus |
24 februari 2013

On the contrary mberg, it IS that simple. Keep your reservation, or cancel. Those are your choices to act on.

Fact is the 60s WERE delivered later than people originally expected. Tesla DID run into issues with the 60s, so it's not hard to imagine that the 40s are having issues as well.

While I agree Tesla does need to improve on its customer communication, and give people reasons for the delay in the 40s, they DO NOT need to do more than that. Freebees and discounts don't come into it until hard dates and contracts come into it. Tesla said they would make the 40s, and they have not said that has changed. Until then, the 40s WILL be made. It's only a question of when.

Mark K |
24 februari 2013

Vawlkus - I don't believe that's true.

After the initial delay in getting the 85 line started, the 60 was phased in with the originally contemplated offset time. They didn't have problems with the 60, they just stuck to their planned staggering of the intros.

Not sure you have followed the dialog here, but contracts were in fact signed, as early as August 2012, and delivery dates were given, but not kept.

In fact delivery windows were used to induce people to sign contracts early, but those windows were not honored.

It is frustrating to those buyers who have experienced these things to hear others wave them off as nonexistent.

ChasF |
24 februari 2013

Vawlkus - As said here before, it will not be productive to go back and forth between those with different perspectives, so I will make one last argument for whether the 40s deserve some sort of "compensation".

Some of the 85's or 60's that have recieved their cars, are now happy with the experience and now are only concerned about the well being of the company so that they will be taken care of from this point on.

The 40's have not yet have those experiences and are approaching the point where one of those experiences may never happen, even though some 40's have reserved up to 4 years ago. Those getting their cars now are seen in the public eye as trailblazers, leaders of a revolution. Those getting their cars in the late summer, after roughly 15K cars are on the road, will most likely be seen as followers, not having to courage to step out when nobody knew if these cars were worth the effort, time, or money until thousands had already been driven, reviewed, and proven. I'll bet you won't see any 40kWh owners featured in magaziine or newspaper articles after June like I've seen some of the more recent reciepients. There may never be any recognition that those early 40's deserve just as much credit for the revolution as those that have been driving their cars for the best part of a year.

That experience is part of what I feel I paid for by getting in line ealy and to rob me of that is a realized loss. I will never agree with those that believe the 40's should accept an "I'm sorry" from Tesla and move on. Even if thats what finally happens.

halfstar28 |
24 februari 2013

well I cancelled the 40kwh twice and I won't reserve again. I am getting either a Prius plug in or Lexus ct. goodbye tesla. I'll consider tesla again in 10 years when I replace my car.

Crow |
24 februari 2013

If you guys are so unhappy you should just ask for your deposit back. Be done with it and move on. You won't get a discount on anything because it would upset those who have been wronged in various ways but didn't get any kind of compensation other than an apology.

Thanks to those who wrote to GeorgeB. He just posted that production of 40kwh units will begin in March.

Mark K |
24 februari 2013

Well Crow, if you drove to a restaurant, studied the menu, ordered your food, and then patiently waited an hour for your meal, would you be pleased to hear the following:

"I'm sorry sir, we had to serve some more important customers first and ran out of food. Please come back another day. But good news! There's no charge!"

You would not walk out of there happy, and you'd likely never return.

The implicit error was not telling the diner at the first sign of conflict.

TM's faux pas is about botched expectation management. It can be redeemed with the genuine overtures, which do not have to hurt the company or other customers.

Administered correctly, the suggestions made above can be accretive of revenue, immaterially dilutive of margin, and will maximize the marginal goodwill toward the company.

Beyond which, it is also simply the honorable thing to do.

Mark K |
24 februari 2013

Just read GB's post.

Hallelujah! Problem solved.

And very clearly now, there was never any technical impediment to release of the 40.

Very happy to hear this, and this thread is resolved.

ChasF |
25 februari 2013

That's much better. It's all about communication.

cloroxbb |
25 februari 2013

Tesla has more in common with a Kickstarter project than GM or Ford at this point.

Patience is really all you need right now.

davidslagle |
26 februari 2013

I can't stress enough how canceling the Tesla S 40kWh will get me back to normal health and well being in my life. Cancellation initiated 2/26/13 11am ET with Raza in ownership experience. This eliminate anymore speculation. Now I'm positive what's in the future. I'm not getting a Tesla S 40kWh due to poor management.

Chuck Lusin |
28 februari 2013

I got the email for the rear seats, first email in a long time, hopefully soon will be for the real car.

Earl0101 |
3 mars 2013

I could imagine that there are technical issues with the 40 even if they are not explicitly announcing it. In any case, the reality is that there is a delay, albeit a shorter one, and many long time reservation holders are unhappy. If profitability is low and/or cost to retool is too high for the 40, they really should phase it out (or not even phase it in) - and let folks know in advance that is their intent with some sort of upgrade possibility.

For my part, I'd move forward with opportunity to get the 60 for a $7K increase. I never understood why the cost per kWh didn't track for the 60 to 85 in the same way it does for the 40 to 60. Even having a 60 with a SW limitation would be desirable - though that is clearly not likely to happen.

In the end TM has got to be concerned about making their customers happy or they won't succeed. Given what has happened to me to this point I'd certainly have to caution against 'buying' a car within the current TM paradigm. Even being someone who champions the electric car, I had major difficulty signing the MVPA. For me the 40 is about buying the right size. However, if I had received the MVPA, regardless of size, after reading the comments in this thread, I don't know if I would have signed. In the end TM can't afford such a loss of trust. The loss in profitability building the 40's now is small relative to the reputation of fairness.

I'm really hoping that TM can step up to fairness of number sequencing and get beyond the immediate shareholder concerns.

Brian H |
3 mars 2013

The TM production line is flexible, but not that flexible. Batching and supply lines still rule.

ChasF |
3 mars 2013

I really don't wish to keep this thread going, but I will say that the relief I felt from George's "it's really only a 4 week delay" email has worn off. I'm back to be pissed that the 40's are being dealt a disproportionately large delay without a good explanation. It would help to see the Tesla crew put in the hours they did in December to help get us back on track. Granted, the situation is different now than then, but it shows it is within their power to turn this around quickly. I'm tired of being pissed off. It's draining.

Mark K |
3 mars 2013

ChasF - at this point, the only cure for what you're feeling is delivery. Let's hope that is forthcoming.

Chuck Lusin |
4 mars 2013

I sure would like an email, when they start to produce the 40, or an email stating that the EPA rating is in for the 40.

I think a lost of us 40's have kind took a break from the forms, because we were so looking at the start of March for some news for the 40.

I got the email for the rear seats, the first email from Tesla in a long time, just to find out it is something about the rear seat, which I did not order anyway! (kind of a different let down, because I was expecting something about the 40)

Xerogas |
20 mars 2013

I got a phone call from a Tesla rep today, and he told me that 40's are in production now (limited, small numbers), and they should start delivering in April. I'm guessing that they will make air suspension first. He wouldn't give me any hard dates, but a guesstimate of May would be the earliest for my 40kWH with standard suspension (res #10,XXX)

murraypetera |
20 mars 2013

Interesting since yesterday I was just told mid summer at best. I have a 2xxx number.

chicagoniner |
20 mars 2013

I called a couple weeks ago and was told likely Mid May to End of June for reservation 83xx

Chuck Lusin |
20 mars 2013

@Xerogas,

I just called today, and asked about the EPA rating on the 40 and they said that it have not be done yet. Also checked on my delivery date and was told May/June. P8467. So no fix yet.

murraypetera |
20 mars 2013

They really should let us 40s upgrade to 60s at a discounted rate perhaps at their cost delta. It is getting a bit rediclous that they will be delivering cars to Europe before reservation holders of 2-3 years.

From December to February to March to June. Time to make amends with the people that helped keep the company a float.

eAdopter |
20 mars 2013

I agree with a lot of what's written above. TM should simply "upgrade" 40's to 60's at zero cost, and queue people who have a 40 MVPA into line per reservation number. Depending on how many 40's are reserved, it may even save TM money when compared to the costs for tooling, testing, etc. required to bring 40's into production. Frankly, seeing others jump ahead of us is a constant irritation.

Brian H |
20 mars 2013

Some need a bit of a reality check, before they begin spending TM's money and fiddling the lineup of offerings. Some very silly suggestions, above.

murraypetera |
20 mars 2013

Brian H

Must you comment on every single post made on the forms? You really need not feel obligee to do so.

DTsea |
20 mars 2013

ok i will do for brian~ as an owner of a 60 with sc why shouldbres holders of 40s get for free what i paid $12000 for????

I bit the bullet and gave in to upgrading to an 85 I don't really need. The wait was just killing me.

Having said that, I too was drawn to a Model S when it appeared that it would have a 300 Mile range, a 5.6 0 to 60 acceleration and a cost of $49,000 and eventually decided that, even though it was not the same care I had envisioned, I would be better off keeping some money.

The wait and the uncertainty of the delivery times, made me change my mind once again.

I truly hope that Tesla delivers the 40s as promised (or at least as soon as possible) and keeps its word.

Good luck to you all.

Vawlkus |
21 mars 2013

Brian H +2

Spoken as someone who cannot (yet) afford or obtain a Tesla at all.

Brian10 |
21 mars 2013

As a reservation holder for over 3 years (40 months to be exact), I had no idea when making my 40KwH reservation that people making reservations 3 years later would be jumping the line and getting their car months before my car gets delivered. I'm sure long-time European reservation holders are frustrated, too. We took a risk on Tesla, helped finance the company all these years, and now we are being treated poorly. I understand why Tesla is making the decision to delay production of the 40's but they are choosing profit over goodwill...and fairness.

eAdopter |
21 mars 2013

I probably wasn't clear enough in my earlier post regarding a free upgrade from 40 to 60, and adjusting the queue so early reservation and/or MVPA holders receive better line placement. It sounds like there are very few 40 reservations, and the 40 may not sell well or be profitable. As both an investor and 40 MVPA signer, it might be cost effective to eliminate the 40 model and all the expense that comes with it. I still prefer a 40 for a variety of reasons, but would accept a free upgrade to 60 if it means earlier delivery and more TM profit. As an investor, I would prefer TM focused on models that are in demand and make money. As I see it, upgrading 40's to 60's free of charge would make sense in every way if TM is not selling many 40's. What's unclear today is how many 40 reservations exist, and how much financial sense this suggestion makes in light of so many unknown numbers. What IS clear is that a growing number of customers are becoming unhappy. I don't think this is good for my investment or the people holding 40 reservations.

muratkaptanoglu19 |
21 mars 2013

I had a great conversation with Scar at the Tesla Customer Call Center yesterday. She indicated that the 40 kwh’s will be in production and I could expect a delivery button toward the end of April and the car by mid May.
Aug 3, 2012 Reserved #109XX, RN3113XX
Dec 12, 2012 Invited to configure
Dec 13, 2012 Finalized order(S40,Gray,Std Air...)
Great arguments on both sides and I thoroughly enjoy the views. Since I am in the financial/investment world, my heart tells me that they are doing wrong for having two lines but my logic tells me that they are doing the right thing financially and for the long term viability for TM.
Good luck to everyone.

FLsportscarenth... |
21 mars 2013

Better communication with the long time 40 reservation holders could have avoided this problem. An upgrade deal for them would likely help the festering situation, certainly not free but maybe at cost? Even a token discount would likely be appreciated by many. I do not not know the numbers but I doubt that dropping the 40 is in the cards. I would guess that battery costs are in flux and 40s will be profitable, if not at the moment than in months to come.

Truly sad to see the cancellations but I do empathize with long time reservation holders. Hopefully the 40 reservation holders will feel a bit better knowing they will be getting a car with fewer bugs (minor as they are). I personally would be patient knowing the time gets me better quality and more time to solidify financial arrangements, but personally would prefer to upgrade to 60 to get supercharging if I was a 40 reservation holder.

Thanks to the patient long time 40 reservation holders... from a TM fan. Best wishes to you all.

hikerockies |
21 mars 2013

@FLsportscarenth.. Well said about getting a car with fewer bugs. That is how I feel as well.

I am a 40kWH reservation holder and waiting patiently. I was hoping to get my car by the start of summer but seems unlikely at this point. I do think it is unfair that people who reserved after me are already getting their car, but at the same time it is also unreasonable to expect Tesla to offer free upgrade to 60kWH. A discount on upgrade to 60kWH is more reasonable but only Tesla knows if that makes financial sense.

DTsea |
21 mars 2013

Better communication is a weak point for TM unfortunately. However... I think the 'profit' rhetoric is misplaced. TM is a PUBLIC company and owes its owners a return. It's also a 'mission driven' company (electric cars for a better world) and if they don't generate cash, and profit, they won't survive and certainly then won't develop Model X or Gen III. I bought the car partly to support that mission... I understand the 'queue jumping' point but each new variant (signature, then P85, then P60, then P40) costs development money to bring to production- homolation, EPA tests, software, on and on- and this HAS to be supported, long term, by cash flow generated by sales of the vehicles.

So... if the first 6000 cars generated less free cash than expected- which is implied by the 10K- it is natural and inevitable (and prudent) to slow product development. Hence the delay for Model X, and probably the 40 kWh car.

Another point is that TM says they are trying to reduce overtime, rework, etc- drive the car's cost down. Increased production system variability is going to make that harder. If they are doing their job right, the trigger point to launch 40s into production should be tied to when the system can handle the extra variability without stress.

I know this is unsatisfying. It's hard when people feel overpromised and underdelivered.

DTsea |
21 mars 2013

Homologation, I meant.

mbergman |
22 mars 2013

Lots of great stuff happening this spring according to George B's latest blog post. I was shocked, shocked, I tell ya, that there was no mention of 40kwh cars. But, after all, there is so much going on it is hard to keep track, as he says.

On the positive side, they are now prepared to take more of my money to service a car I don't have yet.

Sent an email a couple of days ago to the "ownership experience advocate" I've been occasionally communicating with for quite a while now and who has been very helpful and responsive in the past. Expressed my displeasure as to the ongoing absence of official communication regarding production plans.

Seeing as almost a month has passed since George's post on the TMC forums (peculiar way of communicating with customers, if you ask me), I thought that Tesla now should have a better idea of when these cars will actually be, you know, produced.

His response -

"Hi Mark,

Thank you for the email.

My understanding is that Tesla is not yet producing the 40 kWh batteries for customer cars. Development is still ongoing, although I do not have any further specifics at this time. I certainly understand your frustration and will relay this to our teams.

We will update you once information becomes available, sorry that I do not have a new update at this time."

So basically, he is as clueless as the rest of us.

Call me crazy, but I expect to be treated with, at the very least, common courtesy by companies I do business with. If there is no specific news by next week, and I don't expect there to be any, my wife and I will probably cancel our mvpa that promised December/January delivery and get a refund. One thing that is holding us up is the expenses we have already incurred upgrading our electrical infrastructure.

davidslagle |
22 mars 2013

Best bet. Don't do business with a business that's doesn't respect your continued support for 3-1/2 years with a no interest reservation. Don't do business with a company that isn't trust worthy proven by continued broken promises. Promises by such a company after you receive the car could only be worse. Don't do business with a company that only sees green in the form of cash. Look at Tesla Motors promise of an early government loan repayment, partially with your reservation money, instead of using that money to deliver cars they owe customers. The loan terms could still be met. Lets cut to the chase, reconsider your reservation based on all the negative facts Tesla Motors has created in regards to the 40kWh reservation holders. My decision was easy after I realized I was being taken advantage of by Tesla Motors. Justice for Tesla Motors has been served in its best form. My cancellation for a Tesla 40kWh Model S has been completed.

David Slagle

defmonk |
22 mars 2013

Brian H

You have made more than 670 posts, according to Volkerize.com. Most are grammar corrections, particularly of those commenters for whom English may not be the first language. While many of your comments are helpful and forward the discussion, some are simply cruel and churlish. I think that calling very frustrated reservation holders "silly" falls into the latter category.

Longhorn92 |
22 mars 2013

I must admit, I got a little excited this morning when I saw a red button appear on My Garage. Then, I just laughed when I realized it was a "Services Sign Up" button for my 40 kWh car that doesn't yet exist.